As Delivered

January 25, 2012

The United States is pleased to participate in Saudi Arabia’s first Trade Policy Review (TPR) since it joined the WTO in 2005.  As this is the first TPR of the New Year, the United States offers its best wishes to all Members for a year of peace, good health, and prosperity.  Saudi Arabia’s accession to this organization and its continued trade liberalization efforts reflect the successful realization of His Majesty King Abdullah’s vision of economic reform and diversification.

We warmly welcome Minister of Commerce and Industry Dr. Tawfiq AL-RABIAH and the entire Saudi delegation.  We value the report that your delegation submitted for this meeting and we hope that your government will be able to say, when the TPR is finished, that your hard work was well worth the effort in terms of Saudi Arabia’s own self-assessment as well as your government’s contribution to the WTO’s basic principle of transparency.  In addition, we appreciate the Secretariat Report which provides a useful context for exploring Saudi Arabia’s trade and investment policies. Finally, we welcome the discussant, Ambassador Joakim Reiter, and thank him for his input into this important milestone in Saudi Arabia’s WTO Membership.

The Secretariat tells us that since Saudi Arabia’s accession to the WTO in 2005, the Kingdom has continued a development strategy to diversify its economy away from crude oil and natural gas by promoting downstream industries, improving education and health services, and modernizing infrastructure.  Furthermore, the Secretariat points out that Saudi Arabia’s development strategy has concentrated on a liberal trade regime and has been accompanied by structural reforms that have created a more friendly business environment. We note that this strategy resulted in Saudi Arabia’s positive economic performance during 2005-2010, despite the challenges presented by the global economic crisis.  We also note that Saudi Arabia, as a member of the G20, undertook restraint with respect to imposing new trade restrictions despite the global economic downturn.  The trade policy practices of the government, including the commitments it undertook to become a Member of the WTO, seem to be helping Saudi Arabia reach its development goals.

Inasmuch as Saudi Arabia’s economy is increasingly dependent on international trade, we are pleased to note that the government is taking steps to boost its participation in the multilateral trading system, commensurate with Saudi Arabia’s growing importance worldwide, including through the establishment of Saudi Arabia’s WTO mission in June 2010.  Saudi Arabia is becoming a major world merchandise and services trader.  According to the Secretariat, in 2010, Saudi Arabia ranked 12th among world merchandise exporters and 21st among importers.  In services trade, Saudi Arabia ranked 33rd among exporters and 11th among importers. While companies still face investment restrictions in certain activities such as fisheries and oil exploration/drilling/production, Saudi Arabia, the Secretariat reports, has become the eighth largest recipient of FDI in the world.

The United States is proud to be a leading partner in Saudi Arabia’s economic growth and economic reform efforts.  The  United States and Saudi Arabia enjoy a broad, deep and robust bilateral relationship, with cooperation spanning many of the economic and security issues confronting the Middle East and the world.  On the commercial front, U.S. foreign direct investment in Saudi Arabia was $8.0 billion in 2010, and our bilateral trade is expanding.

While Saudi Arabia has reason to be pleased with the results of its economic reform efforts to date, the United States would like to highlight several areas that we believe need greater attention.  In particular, it is important that Saudi Arabia fulfill its commitment to begin GPA accession negotiations, in accordance with Saudi Arabia’s 2005 Working Party Report.  We strongly urge Saudi Arabia to begin its GPA accession by the end of April of this year.  The United States stands ready to work with Saudi Arabia on its GPA accession.  This action would be a good way for Saudi Arabia to work toward boosting its participation in the multilateral trading system, and we will be interested to hear the government’s plans in this regard.

The United States would also like to see Saudi Arabia continue to improve the adequacy and enforcement of IPR protection, including through the imposition of penalties that will deter copyright violations, action to increase the use of legal software within the government, and adequate protection for patented pharmaceutical products.

According to the Secretariat’s Report, Saudi Arabia is harmonizing its regime on standards and technical regulations at the GCC level, and we are pleased to recall that the Kingdom accepted the TBT Code of Good Practice in 2006.  The United States would like to urge Saudi Arabia to continue developing and expanding its efforts to ensure that technical regulations and standards are notified to WTO Members in draft form with enough advance notice that stakeholders have sufficient time to review and  comment and that Saudi authorities can take those comments into account before finalizing the regulation or standard.

The United States has found that consultation with, and involvement by, all interested parties in the regulatory process lead to rules and regulations that better meet their objectives while minimizing trade distorting effects.  U.S. firms are committed to ensuring that their products meet relevant Saudi and GCC technical regulations in order to access the Saudi market, and would like to avoid past instances where they were unaware of technical regulations in advance of implementation, leaving them with little or no time to modify their manufacturing processes.  The United States stands ready to work with Saudi Arabia on this effort.

In addition, Saudi Arabia is a leader within the Gulf Cooperation Council as the GCC reduces trade barriers, harmonizes regulations, and increases transparency.  We encourage Saudi Arabia to work with its GCC colleagues to accelerate that important work in line, of course, with its WTO obligations.  We also request that Saudi Arabia, as well as its GCC partners, complete their review of the Secretariat’s Factual Presentation on the GCC Customs Union, so that it can be reviewed in the Committee on Regional Trade Agreements.

The United States shares a positive and supportive economic partnership with Saudi Arabia, and we hope that Saudi Arabia will find this review to be useful not only in its reform efforts, but also in its efforts to increase its WTO participation.  We look forward to engaging constructively with Saudi Arabia, and all Members, on new approaches to achieving meaningful results in the Doha Round and on innovative approaches to the WTO’s work as an institution, where all major players do their part to liberalize trade and to create and apply meaningful trade rules. As a friend and ally, the United States shares a strong common interest in Saudi Arabia’s continued growth and prosperity.  It is with this perspective in mind that we look forward to working closely with Saudi Arabia to achieve our common goals.

Mr. Minister, we wish you and your team a successful review, and we look forward to further cooperation with Saudi Arabia, both here at the WTO and in our bilateral exchanges.

Thank you.

1. UNITED STATES – CERTAIN COUNTRY OF ORIGIN LABELLING (COOL) REQUIREMENTS

A. JOINT REQUEST BY CANADA AND THE UNITED STATES FOR A DECISION BY THE DSB (WT/DS384/11)

B. JOINT REQUEST BY MEXICO AND THE UNITED STATES FOR A DECISION BY THE DSB (WT/DS386/10)

• The United States is joining Canada and Mexico in asking that the DSB agree to provide additional time for adoption or appeal of the panel reports in these disputes by adopting the draft decision set forth in document WT/DS384/11 and the draft decision in document WT/DS386/10.

• The Appellate Body has informally requested the parties to delay any appeal in these disputes to allow it to better manage its
current workload and complete pending appeals from 2011.

• As Canada and Mexico have expressed, and as has been stated at several previous DSB meetings, the United States views such DSB decisions as exceptional in nature and taken in response to the unusual circumstances faced by the Appellate Body and WTO Members today.

• After discussions with Canada and Mexico, the United States agreed to join in making these requests. The draft decisions would
provide for DSB adoption of the panel reports by negative consensus no later than March 23, 2012.

• We would therefore would appreciate the DSB’s support for the draft decisions.

A.        Recourse to article 7.9 of the scm agreement and article 22.2 of the dsu by the united states (wt/ds316/18)

• On June 1, 2011, the DSB adopted its recommendations and rulings in this dispute.  The DSB recommended that the Member granting each subsidy found to have resulted in adverse effects bring the subsidy into compliance with its obligations under the SCM Agreement.  Under Article 7.9 of the SCM Agreement, the EU and certain member States had six months to withdraw the subsidies or take appropriate steps to remove the adverse effects of the subsidies.
• That six-month period ended on December 1, 2011.  The EU and the four member States at issue have not removed the adverse effects or withdrawn the subsidies within that period.
• In the absence of any agreement on compensation, the United States has requested authorization to take countermeasures at an annual level commensurate with the degree and nature of the adverse effects determined to exist, pursuant to Article 7.9 of the SCM Agreement and Article 22.2 of the DSU.  This amount corresponds to the annual value of lost sales, of exports of U.S. large civil aircraft displaced from the EU market, and of exports of U.S. large civil aircraft displaced from third country markets.
• We took this step in light of Article 22.6 of the DSU, which provides for the negative consensus rule to apply within 30 days of the end of the period for compliance.  If the EU does not object to the U.S. request, the DSB will approve the U.S. request for authorization today unless the DSB decides by consensus to reject the request.  If the EU objects, the matter is automatically referred to arbitration.
• On December 9, 2011, in order to facilitate a resolution of this dispute, the United States also requested consultations with the EU and the member States at issue with regard to this matter.  The EU has accepted our request, and consultations are scheduled for early January 2012.
• We are looking forward to those consultations.  As mentioned at the last DSB meeting, the United States remains prepared to engage in any meaningful efforts that will lead to the goal of ending subsidized financing of large civil aircraft at the earliest possible date.  We hope to find willing partners at the consultations and beyond.
• Finally, the United States notes that we are currently working with the EU on a sequencing agreement for procedures under Articles 21 and 22 of the DSU for the purposes of this dispute.  Any such agreement would be notified to the DSB.

[Second intervention:]

• The United States takes note of the EU’s objection in its statement pursuant to DSU Article 22.6.  Members will be aware of the different views of the parties on this issue.  In the U.S. view, under the terms of the DSU, the EU’s objection automatically results in the matter being referred to arbitration.
• Article 22.6 does not refer to any decision by the DSB in this regard.  Thus, there is no need today for the DSB to take any further action or decision for this matter to be referred to arbitration.
• Nevertheless, we have no objection if the DSB wishes to take note of the fact that this issue has been raised and confirm that it may not consider the U.S. request for authorization, which is the item on the agenda today, since the matter is being referred to arbitration.
• We do note that it would have been preferable had the EU objection been filed before this meeting.  The United States would then have been willing to withdraw its request in light of the referral of the matter to arbitration, and this meeting would have been canceled.  This is the procedure that was followed by Japan and the United States in the US – Zeroing (DS322) dispute.
• Nonetheless, in light of the EU’s objection today, we recognize that the DSB cannot take action on the U.S. request for authorization to take countermeasures.

1. SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

A. UNITED STATES – SECTION 211 OMNIBUS APPROPRIATIONS ACT OF 1998: STATUS REPORT BY THE UNITED STATES (WT/DS176/11/ADD.109)

• The United States provided a status report in this dispute on December 8, 2011, in accordance with Article 21.6 of the DSU.

• Legislative proposals have been introduced in the current 112th Congress that would implement the recommendations and rulings of the DSB.

• The U.S. Administration will continue to work on solutions to implement the DSB’s recommendations and rulings.

B. UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN HOT-ROLLED STEEL PRODUCTS FROM JAPAN: STATUS REPORT BY THE UNITED STATES (WT/DS184/15/ADD.109)

• The United States provided a status report in this dispute on December 8, 2011, in accordance with Article 21.6 of the DSU.

• As of November 2002, the U.S. authorities had addressed the DSB’s recommendations and rulings with respect to the calculation of antidumping margins in the hot-rolled steel antidumping duty investigation at issue in this dispute.

• With respect to the recommendations and rulings of the DSB that were not already addressed by the U.S. authorities, the U.S. Administration will work with the U.S. Congress with respect to appropriate statutory measures that would resolve this matter.

C. UNITED STATES – SECTION 110(5) OF THE US COPYRIGHT ACT: STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.84)

• The United States provided a status report in this dispute on December 8, 2011, in accordance with Article 21.6 of the DSU.

• The U.S. Administration will continue to confer with the European Union, and to work closely with the U.S. Congress, in order to reach a mutually satisfactory resolution of this matter.

D. EUROPEAN COMMUNITIES – MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS: STATUS REPORT BY THE EUROPEAN UNION (WT/DS291/37/ADD.47)

• The United States would like to thank the EU for its status report and its statement today.

• At this last regularly-scheduled meeting in 2011, the United States would like to take a moment to compare the record of the EU’s biotech approval system in 2011 as compared to the record in 2010.

• Members may recall that at the November DSB meeting, the EU stated that it had made 11 biotech approvals during 2010.

• Unfortunately, the record for 2011 indicates growing problems in the operation of the EU biotech approval system.

• In all of 2011, the EU has made final decisions on only two of the dozens of pending biotech product applications.

• As compared to 2010, this represents a substantial decline of over 80 percent in the number of final decisions.

• This decline in final decisions does not result from a reduction in the number of pending applications. To the contrary, the backlog in the EU biotech approval pipeline continues to grow. Currently, over 70 applications are awaiting a decision.

• The United States would also emphasize that delays in making decisions on biotech product applications have real world implications, resulting in substantial barriers to international trade in products derived from modern biotechnology that have been scientifically reviewed and found to be safe.

• The United States urges the EU to address the ongoing problems in the operation of its approval system for biotech products.

E. UNITED STATES – MEASURES RELATING TO ZEROING AND SUNSET REVIEWS: STATUS REPORT BY THE UNITED STATES (WT/DS322/36/ADD.27)

• The United States provided a status report in this dispute on December 8, 2011, in accordance with Article 21.6 of the DSU.

• In December 2010, the Arbitrator in the proceeding under Article 22.6 of the DSU in this dispute issued a communication stating that it had accepted a joint request by the parties to the dispute to suspend its work.

• On November 30, 2011, in response to a joint request of the United States and Japan, the Arbitrator issued a communication stating that it has decided to continue further the suspension. The communication of the Arbitrator has been circulated to the DSB in document WT/DS322/41.

• As the United States explained in its status report, in December 2010 the U.S. Department of Commerce announced a proposal to change the calculation of weighted average dumping margins and assessment rates in certain antidumping proceedings. At this time, the U.S. Department of Commerce is continuing with its ongoing work on the proposal.

F. UNITED STATES – CONTINUED EXISTENCE AND APPLICATION OF ZEROING METHODOLOGY: STATUS REPORT BY THE UNITED STATES (WT/DS350/18/ADD.24)

• The United States has addressed the issue of compliance with the recommendations in this dispute in the status report provided on December 8, 2011, and earlier in today’s discussion of agenda item 1.E. We refer Members to that report and statement for further details.

G. UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS (“ZEROING”): STATUS REPORT BY THE UNITED STATES (WT/DS294/38/ADD.19)

• The United States has addressed the issue of compliance with the findings in this dispute in the status report provided on December 8, 2011, and earlier in today’s discussion of agenda item 1.E. We refer Members to that report and statement for further details.

H. CHINA – MEASURES AFFECTING TRADING RIGHTS AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS AND AUDIOVISUAL ENTERTAINMENT PRODUCTS: STATUS REPORT BY CHINA (WT/DS363/17/ADD.11)

• The United States thanks China for its status report and its statement today.

• As the United States has previously noted, we remain concerned by the lack of progress by China in bringing its measures relating to films for theatrical release into compliance with the DSB recommendations and rulings.

• The United States also has significant concerns about the incomplete progress relative to China’s measures on audio visual home entertainment products, reading materials, and sound recordings.

• The United States is conferring with China on these matters. We hope that China will take steps to resolve this matter soon.

I. EUROPEAN COMMUNITIES AND CERTAIN MEMBER STATES – MEASURES AFFECTING TRADE IN LARGE CIVIL AIRCRAFT: STATUS REPORT BY THE EUROPEAN UNION (WT/DS316/17)

• The EU delivered a long statement with a number of points that the United States will need to address.

• We would like to start by thanking the EU for its written notification and for its statement today. We have carefully reviewed the EU’s notification enumerating steps taken in relation to the recommendations of the DSB.

• Regrettably, our review indicates that these steps do not, in fact, bring the EU into compliance with the DSB’s recommendations and rulings.

• The areas of deficiency in the EU’s assertion of compliance are too large to present in this statement today. Therefore, we will mention but a few examples.

• First, the largest and most recent subsidy at the time of the panel report was launch aid for the A380, the largest and most recent aircraft produced by the EU’s subsidized large civil aircraft industry.

• Although the EU claims to have terminated launch aid agreements for certain older models, the EU has not indicated any changes to its financing of the A380. This fact alone calls into serious question any EU claim of compliance with the DSB recommendations and rulings.

• Second, with respect to subsequent large civil aircraft programs, the United States understands that EU member States have continued to grant the same form of financing covered by the DSB recommendations and rulings. And nothing in the EU’s notification indicates otherwise.

• In light of our serious questions regarding the EU’s compliance, and the many areas of deficiency in the EU notification, the United States has requested consultations with the EU and EU member States, as my EU colleague has already mentioned. That request has been circulated to the DSB in document WT/DS316/19.

• As my EU colleague has also mentioned, pursuant to Article 7.9 of the SCM Agreement and Article 22.2 of the DSU, the United States has requested DSB authorization to take commensurate countermeasures. That request, which was circulated in WT/DS316/18 is on the agenda of a DSB meeting scheduled for December 22nd, this week.

• In relation to the EU’s expression of systemic concern regarding this request, the EU’s concern does not appear to be consistent the clear text of relevant provisions of the DSU or with past practice.

• Under Article 22.6 of the DSU, the negative consensus rule applies within 30 days of the end of the period for compliance.

• By submitting the Article 22.2 request, the United States is preserving its negative consensus rights.

• Taking this step is neither surprising nor unusual. And similar actions have been taken by other Members in other disputes.

• In particular, the United States would draw Members’ attention to the EU’s own actions in the Foreign Sales Corporation (FSC) dispute. In that dispute, the United States claimed that it had fully complied on November 17, 2000. On that same date, the EU filed both a request for consultations pursuant to DSU Article 21.5 and a request for authorization to take countermeasures. The United States objected on November 27, automatically referring the matter to arbitration, and the EU left its request on the agenda of the DSB meeting on November 28. The parties subsequently requested that the arbitration be suspended.

• Thus, the EU as the complaining party in the FSC dispute made the same request for authorization as the United States has made in this dispute. Presumably, the EU did so to preserve its rights under the DSU in a dispute that was important to it.

• There is, of course, one difference between these two disputes. In FSC, the EU requested authorization to take approximately $4 billion in countermeasures whereas, in this dispute, the United States has requested authorization to take countermeasures that we estimate could range between $7-10 billion. Thus, this dispute is up to 250 percent the size of the FSC dispute.

• As the EU has noted in its statement, it has proposed a sequencing agreement to the United States. We are considering this proposal and will be responding shortly.

• In conclusion, as the United States has long said, we remain prepared to engage in any meaningful efforts, including through the formal consultations we have requested, that will lead to the goal of ending subsidized financing of large civil aircraft at the earliest possible date.

J. UNITED STATES – ANTI-DUMPING ADMINISTRATIVE REVIEWS AND OTHER MEASURES RELATED TO IMPORTS OF CERTAIN ORANGE JUICE FROM BRAZIL: STATUS REPORT BY THE UNITED STATES (WT/DS382/10)

• Madam Chair, the United States provided a status report in this dispute on December 8, 2011, in accordance with Article 21.6 of the DSU.

• As noted in the status report, the United States informed the DSB on June 17, 2011, of its intention to implement the DSB’s recommendations and rulings in this dispute. Brazil and the United States agreed that the reasonable period of time to implement would expire on March 17, 2012.

• As the United States explained in its status report, in December 2010 the U.S. Department of Commerce announced a proposal to change the calculation of weighted average dumping margins and assessment rates in certain antidumping proceedings. At this time, the U.S. Department of Commerce is continuing with its ongoing work on the proposal.

Second intervention:

• The United States has taken note of Brazil’s questions and will refer those to capital.

2. UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000: IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

A. STATEMENT BY THE EUROPEAN UNION AND JAPAN

• As the United States has already explained at previous DSB meetings, the President signed the Deficit Reduction Act into law on February 8, 2006. That Act includes a provision repealing the Continued Dumping and Subsidy Offset Act of 2000. Thus, the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

• We recall, furthermore, that Members have acknowledged during previous DSB meetings that the 2006 Deficit Reduction Act does not permit the distribution of duties collected on goods entered after October 1, 2007.

• We therefore do not understand the purpose for which the EU and Japan have inscribed this item today.

• With respect to comments regarding further status reports in this matter, as we have previously explained numerous times, the United States fails to see what purpose would be served by further submission of status reports repeating, again, that the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

• Finally, in light of the EU’s statement today, we would expect to see the EU submit a further status report in DS316, the dispute on EU subsidies for large civil aircraft, at the January 2012 DSB meeting.

4. UNITED STATES – USE OF ZEROING IN ANTI-DUMPING MEASURES INVOLVING PRODUCTS FROM KOREA

A. STATEMENT BY THE UNITED STATES ON IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

• The United States is pleased to report that it has implemented the recommendations and rulings of the DSB in this dispute within the reasonable period of time agreed by the United States and Korea.

• The parties agreed that the reasonable period of time with respect to the diamond sawblades investigation at issue in this dispute would end on October 24, 2011. With respect to this investigation, the Department of Commerce issued a revised determination in which it calculated the antidumping duty margins with offsets, effective October 24, 2011. The order with respect to diamond sawblades and parts thereof from Korea has been revoked.

• The parties also agreed that the reasonable period of time with respect to the investigations on stainless steel plate in coils and stainless steel sheet and strip in coils at issue in this dispute would end on November 24, 2011. With respect to these investigations, the Department issued a revised determination in which it calculated the antidumping duty margins with offsets, effective November 16, 2011. The order with respect to stainless steel plate in coils from Korea has been revoked, and the order with respect to stainless sheet and strip in coils from Korea has been revoked with respect to two respondents.

• Therefore, the United States has fully implemented the recommendations and rulings of the DSB in this dispute within the reasonable period of time agreed by the parties. The United States has circulated further information to Members in a written communication (WT/DS402/7).

6. CHINA – ANTI-DUMPING AND COUNTERVAILING DUTY MEASURES ON BROILER PRODUCTS FROM THE UNITED STATES

A. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY THE UNITED STATES (WT/DS427/2)

• On September 20, 2011, the United States requested consultations with China regarding China’s imposition of antidumping and countervailing duties on chicken broiler products from the United States.

• As noted in the U.S. request for consultations, China’s dumping and subsidy determinations appear to be inconsistent with China’s obligations under the GATT 1994, the Antidumping Agreement, and the Subsidies Agreement.

• The United States has attempted to resolve our concerns through dialogue with China both during and after the investigation at issue. Formal WTO consultations were held on October 28. Unfortunately these efforts failed to resolve the dispute.

• Accordingly, the United States is proceeding to request that the DSB establish a dispute settlement panel.

• As set out in the request for the establishment of a panel, U.S. concerns relate to every aspect of China’s investigation.

• It appears that China failed to apply the appropriate procedures and legal standards, including in finding injury to China’s domestic industry without objectively examining the evidence.

• It appears that China improperly calculated dumping margins and subsidization rates.

• And it appears that China failed to adhere to transparency and basic procedural requirements set out in the Antidumping Agreement and the Subsidies Agreement.

• Members may recall that similar issues are involved in DS414, another dispute the United States has brought, which concerns antidumping and countervailing duties China has imposed on a different product (grain-oriented electrical steel or GOES). This raises the concern that, not only may there be profound procedural and substantive deficiencies in these specific investigations, but there may be systemic issues in the way China is applying its trade remedy laws.

• The United States requests that the DSB establish a panel to examine the matter set out in the U.S. panel request, with standard terms of reference.

7. EUROPEAN UNION – ANTI-DUMPING MEASURES ON CERTAIN FOOTWEAR FROM CHINA

A. JOINT REQUEST BY CHINA AND THE EUROPEAN UNION FOR A DECISION BY THE DSB (WT/DS405/5)

• The United States thanks China and the EU for their communication to the DSB as well as their statements today. We are pleased that the Appellate Body has consulted with the parties regarding its scheduling concerns and that the parties have cooperated to propose the draft decision before the DSB today.

• As has been noted in several previous DSB meetings, the United States agrees that such a proposal should remain exceptional and made in response to the unusual circumstances in which Members and the Appellate Body find themselves today.

• We also would like to express our understanding that the procedural agreement between the parties that is appended to their communication to the DSB does not form any part of the DSB’s decision, which is limited to the draft text set out in the parties’ communication.

(end text)

Geneva,
November 28, 2011

as delivered

The United States warmly welcomes the delegation from Bangkok led by Director-General SRIRAT Rastapana of the Commerce Ministry’s Department of Trade Negotiations to this, Thailand’s sixth Trade Policy Review.  We thank the government and the Secretariat for the reports they prepared for this meeting; and, we welcome our discussant, Australia’s Deputy Permanent Representative Trudy Witbreuk, and thank her for her insightful contribution to this TPR.

We are acutely aware that this TPR is taking place at a very difficult time for Thailand and we convey the heartfelt condolences of the United States as your country struggles with a flooding crisis that has imposed a terrible cost in terms of lives lost, families uprooted and displaced, business disruptions, and job losses.  Our thoughts and prayers are with the Thai people as you seek to recover and rebuild after this difficult and tragic event.

Thailand is an important trading partner and ally of the United States.  The Secretariat Report notes that there has been a treaty basis to our bilateral relationship since 1966; in fact, the underpinnings of our relationship date back to the establishment of diplomatic ties in 1833 through our original Treaty of Amity and Commerce.  More than a century and a half ago, the King of Thailand offered to send elephants to President Lincoln to help with the Civil War effort.  Our trade has come a long way since then.  Last year, it reached $35 billion in two-way goods and services trade, with Thailand running a trade surplus with the United States of more than $10 billion annually during the time span of this review.  Thailand is currently the biggest beneficiary country of the U.S. GSP program, with more than $3 billion of Thai goods entering the United States last year under the GSP program.

Thailand is also a prominent destination of U.S. foreign direct investment, with many well-known American companies – including Ford, GM, and Dow Chemical – at home in the Thai market.  The U.S. Department of Commerce estimates that U.S. companies have invested more than $12 billion in Thailand, primarily in manufacturing, financing, and insurance enterprises, making Thailand the second largest host of U.S. foreign direct investment in ASEAN.

There is little doubt that Thailand continues to prosper from its participation in the multilateral trading system.  Real GDP growth was 7.8 percent last year, rebounding impressively from the contraction in 2009.  There is renewed investor and business confidence in Thailand, which the floods cannot extinguish.  The IMF projects Thailand’s real GDP growth to continue at a brisk pace – at least 5 percent annually – until 2016.  Inflation has been low and unemployment is at an enviable 1 percent.  Thailand’s progress in transforming and developing its economy over the past thirty years reached an important benchmark in August, when the World Bank announced that it was moving Thailand into the category of upper middle income countries.  This is an important achievement.

In the Government Report, Thailand conveys two important messages – first, it is committed to further opening of its markets through liberalization, and second, it attaches a high priority to strengthening the competitiveness of its domestic economy.  Thailand has taken some initial steps in these areas already, including in the insurance sector, where a program of liberalization is underway, and in telecommunications, where the government has created a new body to promote regulatory oversight.  These efforts have the potential to greatly benefit Thailand by attracting foreign direct investment for infrastructure development, including flood reconstruction projects, and by fostering a business climate in which domestic demand – not just exports – can be a strong engine of economic growth.  We wish the Thai government well with these initiatives, which will also benefit Thailand’s trading partners.

Looking ahead, we are particularly interested in Thailand’s plans for further customs reform.  As the Secretariat Report notes, some progress has been made in implementing the single window, which will facilitate trade within ASEAN and with third countries.  Yet Thailand has not completed the legal amendments necessary to comply with the revised Kyoto Convention on customs procedures, and a perception of corruption and unfairness about the decisions and activities of Thai customs continues to impede trade and damage Thailand’s reputation as a trading partner.  In particular, serious problems remain with the penalties and reward system, which causes conflicts of interest and an environment that is punitive and debilitating to trade.  While we were encouraged by Thailand’s efforts last year to propose legislation to address these issues, the legislation did not pass Parliament and has been returned to the Finance Ministry for reconsideration.  We hope Thailand will continue to make customs reform a high priority and we would appreciate an update from the Thai delegation on the government’s plans in this area.

We also hope that Thailand will continue to make intellectual property rights protection and enforcement a top priority.  We want to recognize the various commitments made by Thai authorities to strengthen their legal framework for intellectual property rights protection and enforcement, including by plans to advance legislation to implement the WIPO Internet Treaties, address landlord liability, prevent the unauthorized camcording of motion pictures in movie theaters, and provide customs officials and other law enforcement officials with ex officio authority to seize suspect goods absent a formal complaint by rights holders.  In addition, we welcome the government’s efforts to foster innovation and promote public awareness of the benefits of intellectual property protection through its Creative Economy initiative.  While the United States remains concerned about Thailand’s lack of sufficient copyright protection for digital and ecommerce activities, the pervasive availability of pirated and counterfeit hard goods, and the government’s ineffective enforcement system, we encourage Thailand to continue its important efforts to strengthen its IPR regime.  In particular, we are interested in learning about the government’s plans for resubmitting the legislation to the new Parliament for consideration.

We would welcome an update from the government of Thailand on its efforts to improve access to its telecommunications market, which lags other countries in deploying advanced wireless technologies.  The Secretariat Report notes that the Ministry of Information and Communication Technology is the one responsible for reflecting the direction of further liberalization of Thailand’s telecommunications services in Thailand’s GATS schedule.  We would like to know when Thailand will implement its 1997 commitments; specifically, when it will update its schedule to reflect the new foreign equity limits and attach to its schedule the Reference Paper on regulatory principles (developed in the Negotiating Group on Basic Telecommunications) which reflects the regulatory changes Thailand has already implemented.  Thailand has failed to reflect these changes in its WTO schedule, as it committed to do in 1997, when it pledged to introduce such changes into its GATS schedule no later than 2006.

The government of Thailand reports that it has taken steps to eliminate foreign ownership restrictions on some telecommunications activities.  We are concerned, however, that a new regulation – issued in August – is a setback in Thailand’s efforts to foster a more competitive and transparent business environment in this sector.  The proposed regulations prohibit foreign equity holdings of more than 49 percent, and they introduce imprecise new restrictions on foreign ownership, management, and shareholding structures that are not well understood by foreign investors.  We urge Thailand’s government to revise or suspend these regulations, which will have a deleterious effect on Thailand’s economy – especially at a time when Thailand needs the strongest possible communications network for its reconstruction efforts.

Another major theme of our questions relates to market access concerns in several areas, including the use of import fees, import permits, the administration of tariff quotas, and the use of SPS and TBT measures and non-science based regulations to restrict trade.  We look forward to reviewing Thailand’s responses and hope that Thailand will continue to work with us to try to resolve the underlying issues, including problems affecting our pork trade, as soon as possible.

In closing, we appreciate the opportunity to participate in this meeting and discuss Thailand’s trade and investment policies.  We also express our appreciation for Thailand’s responses to our written questions and look forward to reviewing them.  We look forward to working with Thailand and with other Members as we take steps together to strengthen the rules-based multilateral trading system.  We wish Thailand a successful review and thank the delegation for its attention to our questions and concerns.

Thank you.

Delivered by David P. Shark,

Geneva,
November 14, 2011
Thank you, Chair.  I will follow the Chair’s guidance and minimize welcoming and common courtesies in my opening remarks, although I hope that Ecuador recognizes that our welcome and thanks are nonetheless there.

The United States is pleased to note that Ecuador has weathered the recent global economic downturn relatively well, as the economy grew by 3.6% in 2010, and is expected to grow by another 5.1% in 2011.  The economy has benefited from higher prices for oil exports and a strong rebound in domestic demand, especially public investment in infrastructure projects.

However, the United States is concerned that Ecuador’s economy remains vulnerable to future external shocks due to its over dependence on oil export revenues and expatriates’ remittances. While we recognize that Ecuador’s monetary regime, which includes “dollarization,” has contributed to relatively low inflation rates, it has limited Ecuador’s macroeconomic policy options in responding to such shocks.  Ecuador’s fiscal deficit increased to 5.1% of GDP in 2009, largely due to the drop in revenues from oil exports, and increased public spending, which caused a saving-investment gap in Ecuador’s current account. The Government responded by imposing quantitative restrictions and a tariff surcharge on a large number of imported products which resulted in an excess of Ecuador’s bound tariff rates from January 2009 to July 2010.

The United States is also concerned that since 2009, FDI inflows to Ecuador have dropped considerably, mainly due to new economic and trade development goals based on the 2008 Constitution.  Foreign investment may not only have helped Ecuador bridge its national saving and gross domestic investment gap in 2009 and 2010, but investment also helps disseminate know-how and new technology, which is the main source of long term productivity growth, and helps increase competitiveness.  Ecuador generally ranks poorly in global comparisons of economic competitiveness. Indeed, the World Economic Forum’s Global Competitiveness Index rated Ecuador 105^th out of 139 countries for 2010-11.

Although Ecuador has proceeded with reforms of tariff and non-tariff measures since its TPR in 2005, regrettably Ecuador still clings to its inward-looking approach, placing increased emphasis on the use of these and other measures to implement, as the Secretariat says, “its endogenous economic and social development strategy in accordance with new priorities, including import substitution in certain sectors.” A lack of transparency in Ecuador’s legal framework has also caused concern for foreign investors.  Even though Ecuador has passed new legislation in several trade and trade-related areas since 2008, no comprehensive regulatory reform has been undertaken to simplify the existing legal framework.  For example, in its Report, Ecuador says it will discourage imports that adversely effect national production, the population, and nature, but does not explain how “adverse effect” is defined or determined.  This uncertainty in many aspects of Ecuador’s trade policy contributes greatly to the difficulties of firms, particularly small and medium-sized enterprises, trying to invest in and trade with Ecuador. This negatively impacts Ecuador’s ability to compete.  We ask Ecuador to more fully explain this process in light of its WTO obligations, since Ecuador has, in the past, restricted imports on some commodities with the explicit goal of protecting domestic producers.

 Furthermore, while Ecuador has tried to provide updated WTO notifications, a number of them remain outstanding. Specifically, Ecuador has failed to adequately submit the ad valorem equivalents (AVE) for over 300 tariff lines or the methodology and calculations used to calculate the AVE. We are concerned that Ecuador believes the AVE on these tariff lines to be 30 percent, which, when applied to items worth $29 or less under the mixed tariff scheme for footwear and all textile and apparel items, would be charged a duty higher than 30 percent of the value of the goods.  Ecuador has not replied to Members’ questions contained in G/C/W/639 addressing the reasons why Ecuador modified its tariffs on these items.  We reiterate our request that Ecuador please provide the reasons why it modified its tariffs on the over 300 tariff lines covered by Presidential Decrees 367 and 372.

 The Secretariat’s Report also points out that while Ecuador’s average applied MFN tariff rate dropped from 11.4% in 2005 to 9.3% in 2011, the average MFN tariff for agricultural products rose from 16.7% to 19.6% during the same time period, and is among the highest in the region. Furthermore, 19 ten digit lines exceed the bound rates by 5 to 15 percentage points; and, the use of compound rates on items bound on an ad valorem basis, and Ecuador’s non submission of their ad valorem equivalents (AVEs) casts doubt, as the Secretariat says, “on whether these rates are within their binding levels”.

Ecuador has also failed to notify the WTO of new import licensing procedures, and SPS standards for imports, among others. It is not clear why Ecuador applies different standards between Andean Community members and third countries.  In the spirit of transparency we are interested to know when Ecuador will notify each of the outstanding practices identified in the Secretariat’s Report for this TPR, including those required by the TBT, SPS and TRIPS agreements, and how Ecuador will ensure that the timely notification of future regulations is accomplished.

With regard to TRIPS, the Secretariat says that the 2008 Constitution prohibits the appropriation of ancestral (otherwise, traditional) knowledge on biodiversity. We would ask Ecuador to explain this exclusion in light of TRIPS Article 27, which requires patents to be made available without discrimination in the field of technology. In addition, the Ecuadoran IP law extends protections to geographical indications. However, it is unclear whether the law provides the legal means for interested parties to prevent the use of misleading geographical indications in light of Article 22 of the TRIPS Agreement. Adequate and effective protection of intellectual property, in our view, is a critical factor in the pursuit of fostering investment and enhancing innovation and creativity.  We hope that Ecuador will reconsider these restrictions and take the necessary steps to ensure their consistency with the WTO.

The United States is also concerned about the effective enforcement of IP rights. Although Ecuador has a relatively comprehensive legal framework, it is unclear whether a criminal ex officio authority exists to initiate legal or administrative claims on behalf of IP rights holders. We ask Ecuador to confirm whether an ex officio authority exists. In addition, we ask Ecuador to explain why it is difficult for courts to ensure compliance with their orders regarding IP rights.

Finally, the Secretariat reports that criminal penalties and fines for copyright infringement are low, and that Ecuador indicated that they are being revised. We look forward to an update on what, if any, other amendments Ecuador is making to its intellectual property laws.

The United States appreciates the opportunity to engage in this dialogue, and we look forward to discussing further Ecuador’s trade policy regime.  We appreciate the answers that Ecuador probided and will examine them, in particular, to prepare for the second day of this review.  We also look forward to working with Ecuador and with other Members as together we take steps to strengthen the rules-based multilateral trading system.  In closing, we wish Ecuador a successful review.  Thank you.

- as delivered –

1.         SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

A.        UNITED STATES – SECTION 211 OMNIBUS APPROPRIATIONS ACT OF 1998:  STATUS REPORT BY THE UNITED STATES (WT/DS176/11/ADD.107)

The United States provided a status report in this dispute on October 13, 2011, in accordance with Article 21.6 of the DSU.

Legislative proposals have been introduced in the current 112^th U.S. Congress that would implement the recommendations and rulings of the DSB.

The U.S. Administration will continue to work on solutions to implement the DSB’s recommendations and rulings.

[Second intervention:]

The United States has in previous meetings replied to certain systemic concerns raised by some Members.  The United States continues to believe that the facts simply do not support those Members’ assertions or justify such systemic concerns.  The record is clear:  the United States has come into compliance, fully and promptly, in the vast majority of its disputes.

As for the remaining instances where our efforts to do so have not yet been entirely successful, the United States has been working actively towards compliance in furtherance of the purpose of the dispute settlement system.

We have also in past meetings described the legislative activity related to this matter.  In response to some Members’ comments we can do so again today.

In the U.S. Senate, S. 603 was introduced on March 16, 2011.  This bill has been referred to the Senate Committee on the Judiciary.

In the U.S. House of Representatives, four bills have been introduced that would either modify or repeal Section 211:

H.R. 1166, which was introduced on March 17, 2011, and has been referred to the House Committee on the Judiciary.

2.         UNITED STATES – CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000:  IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

A.        STATEMENTS BY THE EUROPEAN UNION AND JAPAN

As the United States has already explained at previous DSB meetings, the President signed the Deficit Reduction Act into law on February 8, 2006.  That Act includes a provision repealing the Continued Dumping and Subsidy Offset Act of 2000.  Thus, the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

We recall, furthermore, that Members have acknowledged that the 2006 Deficit Reduction Act does not permit the distribution of duties collected on goods entered after October 1, 2007, more than 4 years ago.

We therefore do not understand the purpose for which the EU and Japan have inscribed this item today.

With respect to comments regarding further status reports in this matter, as we have already explained at previous DSB meetings, the United States fails to see what purpose would be served by further submission of status reports repeating, again, that the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

We are not aware of other Members, including those inscribing this item today, continuing to provide status reports in similar circumstances.

3.         UNITED STATES – ANTI?DUMPING MEASURES ON CERTAIN SHRIMP AND DIAMOND SAWBLADES FROM CHINA

A.        REQUEST FOR THE ESTABLISHMENT OF A PANEL BY CHINA (WT/DS422/3)

While the United States believes that the initiation of this dispute was unnecessary, the United States is pleased that the parties were able to reach a procedural agreement which should expedite the proceedings and decrease the burden on the parties and the dispute settlement system.  As noted by China, that agreement was circulated to Members in document WT/DS422/4.

Consistent with the procedural agreement, the United States does not oppose the establishment of a panel today.

We would also note that the U.S. Department of Commerce has discontinued zeroing in the context of average-to-average comparisons in investigations.

(end text)

Statement delivered by Ambassador Michael Punke
Deputy U.S. Trade Representative and U.S. Permanent Representative to the World Trade Organization

Geneva,
October 19, 2011

As Delivered

Thank you, Mr. Chairman.  Let me start by saying that we appreciate the efforts that all participants have undertaken to make this TPR a productive one.

Zimbabwe’s political and economic story, unfortunately, seems to be one filled with tribulation.  Although Zimbabwe inherited one of the strongest and most complete industrial infrastructures in sub-Saharan Africa, in addition to being endowed with abundant natural resources, an educated workforce, considerable energy alternatives, international tourist attractions, extensive wildlife, and a strong agricultural base, the country today is beset with problems.  Rapidly deteriorating infrastructure, with electricity and water cuts now commonplace, political turmoil, and poor management of the economy, have all led to considerable economic hardships. Investor confidence remains low due to insecurity of land tenure and indigenization laws that require, in theory if not always in practice, that 51 percent of investments be owned by Zimbabwean citizens.  While agriculture still contributes modestly to GDP, it is no longer the backbone of the Zimbabwean economy.  Nonetheless, according to the Secretariat’s Report, agriculture remains Zimbabwe’s principal source of employment and continues to have a multiplier effect on the economy.  Large-scale commercial farming has nearly collapsed over the course of the last 9 years under the government’s controversial land reforms.

With regard to global comparisons of economic competitiveness, Zimbabwe generally ranks poorly.  For example, in the World Bank’s “Doing Business” rankings for 2011, Zimbabwe stands at number 157 out of 183 economies. With a relatively diversified economy, and a highly educated and skilled labor force, Zimbabwe is potentially a major investment destination.  However, the Secretariat points out that inflows of foreign direct investment (FDI) into Zimbabwe decreased considerably in 2005-10 mainly due to the socio-political crisis, insecurity of land tenure, as well as enforcement of indigenization and empowerment regulations aimed at securing 51 percent ownership of businesses worth over US$500,000 to indigenous Zimbabweans.

We recognize that Zimbabwe is an original WTO Member, having been a GATT contracting party, and that it has been an active participant in the Doha Round negotiations. In its Report, the government says it is developing a National Trade Policy, which will “leverage” its Industrial Development Policy.  In the absence of a comprehensive trade policy in recent years, Zimbabwe has from time to time imposed tariffs and import bans on some commodities with the explicit goal of protecting domestic producers.  This suggests that the National Trade Policy may likewise restrict trade for the purpose of import substitution at the cost of efficiency and broad-based growth.  We have asked Zimbabwe to spell out more clearly the goals it will aim for in its National Trade Policy, the efforts it will undertake to ensure its consistency with the WTO, and the role of public consultation in the development and implementation of this Policy.  We look forward to hearing more about Zimbabwe’s plans in this regard.

Furthermore, while Zimbabwe has tried to provide updated WTO notifications, a number of them remain outstanding.  In the spirit of transparency, we are interested to know when Zimbabwe will notify each of the outstanding practices identified in the Secretariat’s Report for this TPR, including those required by the TBT, SPS and TRIPS agreements, and how Zimbabwe will ensure the timely notification of future regulations.

With regard to TRIPS, the Secretariat advises that the TRIPS Council reviewed Zimbabwe’s intellectual property legislation at a time when some key amendments were not yet put into operation and that no notifications have been submitted to the WTO since then.  We are keen to know when Zimbabwe will bring its notifications up-to-date and look forward to an update on what, if any, other amendments Zimbabwe has made to its intellectual property laws since 2004. Adequate and effective protection of intellectual property, in our view, is a critical factor in the pursuit of fostering investment and enhancing innovation and creativity.  We hope that Zimbabwe will keep this element in mind as it seeks to improve its capacity to attract trade and investment.

The Secretariat points out that Zimbwabe has lowered its applied MFN tariff rates unilaterally, with a view to reducing production costs.  But, at 15.4 percent, Zimbabwe’s simple average applied MFN tariff, the Secretariat tells us, “is among the highest in the region”. Furthermore, Zimbabwe’s MFN tariff rates on 61 lines exceed the corresponding bound levels in some cases by as much as 60 percentage points, although its tariff bindings cover only 22.4 percent of all lines.  Furthermore, 64 lines carry non-ad valorem rates that could potentially exceed their ad valorem bindings.  We hope to hear Zimbabwe’s plans for addressing this problematic circumstance during the course of this TPR.

Zimbabwe notes in its Report that the government maintains rules requiring licenses for the export of some commodities.  The secretariat’s report shows that these restrictions apply to a broad range of products, including some of Zimbabwe’s chief exports.  These restrictions disrupt links between domestic and external markets, promote rent-seeking, and lower the incomes of producers.  The 2007 ban on groundnut exports, which was recently eased somewhat, and this year’s ban on raw chrome exports illustrate these effects.  We will be interested to know Zimbabwe’s plans to review its policies requiring export licenses.

The Secretariat remarks that Zimbabwe is among the region’s leaders in deploying and upgrading computerized customs clearance systems.  We would encourage Zimbabwe to continue its efforts in this regard.  We have a number of questions regarding Zimbabwe’s customs procedures and valuation practices as well as its prohibitions, quantitative restrictions, controls and licensing procedures which we submitted for written responses.  We hope that Zimbabwe has shed some light on the issues we raised and we look forward to examining Zimbabwe’s answers carefully so that we can better understand how business is conducted.

In closing Mr. Chairman, today the United States has identified many of the questions that we submitted for Zimbabwe’s written responses. We will, of course, review the government’s responses with great interest.  We look forward to working with Zimbabwe and with other Members as together we take steps to strengthen the rules-based multilateral trading system.  Finally, we offer Zimbabwe our best wishes for a successful TPR.

Thank you.

-as delivered-

1. UNITED STATES – MEASURES AFFECTING IMPORTS OF CERTAIN PASSENGER VEHICLE AND LIGHT TRUCK TYRES FROM CHINA

A. REPORT OF THE APPELLATE BODY (WT/DS399/AB/R) AND REPORT OF THE PANEL (WT/DS 399/R)

• Madam Chair, the United States is pleased to propose the adoption of the Panel and Appellate Body reports in this dispute.

• We would first like to thank the members of the Panel and the Secretariat assisting them for their work and compliment the Panel on its thorough evaluation of the issues in the dispute and for a clear and well-reasoned report.

• We likewise thank the Appellate Body and the Appellate Body Secretariat for their work on the dispute. With one minor exception that did not affect the conclusions, the Appellate Body affirmed all of the Panel’s analysis and conclusions.

• The United States takes its WTO obligations seriously, and we are obviously pleased with this confirmation that, as we had said all along, our imposition of additional duties on Chinese tires was fully consistent with our WTO obligations.

• The evidence demonstrating a surge in Chinese tire imports was overwhelming. Over the period of investigation imports of tires from China grew by 215 percent, increasing from some 14 million tires in 2004 to almost 46 million tires in 2008. Chinese tire imports more than tripled their share of the U.S. market, growing from 4.7 percent in 2004 to 16.7 percent in 2008.

• The evidence also demonstrated a clear coincidence in trends between the rapidly increasing imports and their effects on the U.S. domestic industry. Given such a massive increase, and the market disruption that resulted, the United States had a clear basis to impose the safeguard measure to protect U.S. workers and businesses.

• Before the panel, China challenged the tires investigation by the U.S. International Trade Commission, the remedy imposed by President Obama, and the U.S. Section 421 legislation. The panel rejected all of China’s claims.

• China then appealed some, but not all, of the Panel’s legal conclusions and interpretations. The Appellate Body rejected all of China’s appeals.

• As a result, China has not prevailed on any of its challenges to the U.S. tires safeguard or the U.S. safeguard legislation.

• This is the first time under the WTO that any kind of safeguard measure has been completely upheld. Indeed, you have to reach back to 1951 for the last such occurrence under the GATT system.

• And so, we commend both the Panel and the Appellate Body for their well-reasoned reports, with analysis firmly grounded on the text of China’s Protocol of Accession. The reports also reflect a clear appreciation and understanding of the practical issues that administering authorities must grapple with as they conduct investigations consistent with a Member’s obligations.

• While the United States is obviously very pleased with the substantive content of the Panel and Appellate Body reports, and will welcome their adoption by the DSB today, we nonetheless believe it is important to draw Members’ attention to certain systemic issues related to the delay in issuance of the Appellate Body report beyond the 90 days specified in the DSU.
• In this dispute, the United States would like to affirm the value both of transparency and of meaningfully consulting with, and obtaining the agreement of, the parties to the dispute with respect to any delay in issuing the report beyond 90 days. We recall that DSU Article 17.5 provides, in its last sentence: “In no case shall the proceedings exceed 90 days.”
• Concerns with regard to a lack of transparency have been expressed by the United States and other Members in prior DSB meetings. Pursuant to DSU Article 17.5, the Appellate Body notified the DSB through a letter circulated on 27 July that it would not be able to complete its report within 60 days.1 While the notice informed the DSB of the expected circulation date, it did not note that this date was beyond the 90-day deadline. Moreover, contrary to past practice, the notification made no mention of whether the parties had been consulted on this issue or whether each party had agreed. Neither does the Appellate Body report mention these issues.

• And in fact, both parties had not agreed that the report could be provided beyond the 90-day deadline specified in Article 17.5 of the DSU. On July 30, following receipt of the 60-day notice, the United States wrote to the Appellate Body Division hearing the appeal, seeking further information as to why it would not be possible to circulate its report within the 90-day deadline.

• On August 12, the Division replied that it “considers the DSB should be notified of the reasons for the delay . . . and will furnish such reasons when it circulates the Report.”
This letter together with the September 5 communication2 from the Appellate Body to the DSB furnishing those reasons suggests that the Appellate Body knew at the time of the 60-day notice and the U.S. inquiry what the reasons for the delay were and could have provided them to the DSB and to the parties at that time.

• This lack of transparency on the reasons for the delay and whether there was agreement of the parties is unfortunate.

• Members of course are well aware of the workload of the Appellate Body and have been cooperating, including through DSB decisions to extend the time period for adoption or appeal of panel reports, in the scheduling of appeals. This year, for example, the United States has joined with other Members to propose three such DSB decisions, including in this very dispute.

• In certain appeals, these mechanisms have not been sufficient. For example, where the issues raised on appeal have been numerous or complex or the Appellate Body’s workload has indicated a need for more time, the Appellate Body has in the past made a request to the parties for time beyond the 90 days. In those instances, parties have in our experience always engaged constructively with the Appellate Body to agree on an overall
time period and suitable filing dates for the appeal. The United States has so agreed in two appeals just this year.

• The Appellate Body has then been able to inform the DSB that, with the agreement of the parties, its report would be issued beyond the 90-day deadline. Members have not objected to such an arrangement.

• In this case, however, the Appellate Body did not seek the agreement of the parties or even consult meaningfully with them on this issue.

• This is the first time that the Appellate Body has operated in this fashion. The United States considers that the issuance of a report by the Appellate Body beyond the 90-day deadline in DSU Article 17.5 without meaningful consultation with the parties, and even more importantly without the affirmative agreement of the parties, should not be repeated in the future.

• In sum, the United States is very pleased with the substantive content of the Panel and Appellate Body reports. And it would have been easier for us to focus only on the positive elements today. Where systemic issues are implicated, however, we consider that Members should seek to act systemically, and that is what we have tried to do in this statement.

• With this said, given the circumstances of this dispute, we welcome the adoption of the reports today.

As delivered by the United States
Geneva,
September 27, 2011

In relation to adoption of the agenda, the United States welcomes Korea’s decision to withdraw its panel request from the agenda of today’s meeting.  We consider that Korea has withdrawn its panel request as of right.  Korea’s withdrawal of its proposed item is not subject to a consensus decision by the DSB.

1.         SURVEILLANCE OF IMPLEMENTATION OF RECOMMENDATIONS ADOPTED BY THE DSB

A.        UNITED STATES – SECTION 211 OMNIBUS APPROPRIATIONS ACT OF 1998:  STATUS REPORT BY THE UNITED STATES (WT/DS176/11/ADD.106)

The United States provided a status report in this dispute on September 15, 2011, in accordance with Article 21.6 of the DSU.

Legislative proposals have been introduced in the current 112^th Congress that would implement the recommendations and rulings of the DSB.

The U.S. Administration will continue to work on solutions to implement the DSB’s recommendations and rulings.

B.        UNITED STATES – ANTI‑DUMPING MEASURES ON CERTAIN HOT‑ROLLED STEEL PRODUCTS FROM JAPAN:  STATUS REPORT BY THE UNITED STATES (WT/DS184/15/ADD.106)

The United States provided a status report in this dispute on September 15, 2011, in accordance with Article 21.6 of the DSU.

As of November 2002, the U.S. authorities had addressed the DSB’s recommendations and rulings with respect to the calculation of antidumping margins in the hot-rolled steel antidumping duty investigation at issue in this dispute.

With respect to the recommendations and rulings of the DSB that were not already addressed by the U.S. authorities, the U.S. Administration will work with the U.S. Congress with respect to appropriate statutory measures that would resolve this matter.

C.        UNITED STATES – SECTION 110(5) OF THE US COPYRIGHT ACT:  STATUS REPORT BY THE UNITED STATES (WT/DS160/24/ADD.81)

The United States provided a status report in this dispute on September 15, 2011, in accordance with Article 21.6 of the DSU.

The U.S. Administration will continue to confer with the European Union, and to work closely with the U.S. Congress, in order to reach a mutually satisfactory resolution of this matter.

D.        EUROPEAN COMMUNITIES – MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS:  STATUS  REPORT BY THE EUROPEAN UNION (WT/DS291/37/ADD.44)

The United States thanks the EU for its status report and its statement today.

The United States remains concerned with delays in the EU’s approval system for biotech products, and the resulting effects on trade.  The United States is likewise concerned with bans adopted by EU member States on biotech products approved at the EU level.

As my EU colleague noted, U.S. delegation will shortly be meeting with EU officials in Brussels to discuss these matters and related issues.  The United States looks forward to a constructive discussion with the European Union.

E.         UNITED STATES – MEASURES RELATING TO ZEROING AND SUNSET REVIEWS:  STATUS REPORT BY THE UNITED STATES (WT/DS322/36/ADD.23)

The United States provided a status report in this dispute on September 15, 2011, in accordance with Article 21.6 of the DSU.

In December 2010, the Arbitrator in the proceeding under Article 22.6 of the DSU in this dispute issued a communication stating that it had accepted a joint request by the parties to the dispute to suspend its work.

On September 13, 2011, in response to a joint request of the United States and Japan, the Arbitrator issued a communication stating that it has decided to continue the suspension.  The communication of the Arbitrator has been circulated to the DSB in document WT/DS322/39.

As the United States explained in its status report, in December 2010 the U.S. Department of Commerce announced a proposal to change the calculation of weighted average dumping margins and assessment rates in certain antidumping proceedings. At this time, the U.S. Department of Commerce is continuing with its ongoing work on the December proposal.

F.         UNITED STATES – CONTINUED EXISTENCE AND APPLICATION OF ZEROING METHODOLOGY:  STATUS REPORT BY THE UNITED STATES (WT/DS350/18/ADD.21)
The United States has addressed the issue of compliance with the findings in this dispute in the status report provided on September 15, 2011, and earlier in today’s discussion of agenda item 1.E.  We refer Members to that report and statement for further details.

G.        UNITED STATES – LAWS, REGULATIONS AND METHODOLOGY FOR CALCULATING DUMPING MARGINS (“ZEROING”):  STATUS REPORT BY THE UNITED STATES (WT/DS294/38/ADD.15)

The United States has addressed the issue of compliance with the findings in this dispute in the status report provided on September 15, 2011, and earlier in today’s discussion of agenda item 1.E.  We refer Members to that report and statement for further details.

In September 2010, the Arbitrator in the proceeding under DSU 22.6 in this dispute issued a communication stating that it had accepted a joint request by the parties to the dispute to suspend its work.

On September 16, 2011, in response to a joint request of the United States and the EU, the Arbitrator issued a communication stating that it has decided to continue the suspension.  The communication of the Arbitrator has been circulated to the DSB in document WT/DS294/40.

H.        CHINA – MEASURES AFFECTING TRADING RIGHTS AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS AND AUDIOVISUAL ENTERTAINMENT PRODUCTS:  STATUS REPORT BY CHINA (WT/DS363/17/ADD.8)

The United States thanks China for its status report and its statement today.

As the United States has previously noted, the United States remains concerned by the lack of progress by China in bringing its measures relating to films for theatrical release into compliance with the DSB recommendations and rulings. 

The United States also has significant concerns about the incomplete progress relative to China’s measures relating to audio visual home entertainment products, reading materials, and sound recordings. 

The United States is conferring with China on these matters and hopes that China will take steps to resolve this matter soon.

2.         UNITED STATES – ANTI-DUMPING MEASURES ON CERTAIN SHRIMP FROM VIET NAM

A.        IMPLEMENTATION OF THE RECOMMENDATIONS OF THE DSB

As noted by the Chair, on September 2, 2011, the DSB adopted the Panel report in the dispute United States – Anti-Dumping Measures on Certain Products from Viet Nam (WT/DS404/R).

This morning, as provided in the first sentence of Article 21.3 of the DSU, the United States wishes to state that it intends to implement the recommendations and rulings of the DSB in a manner that respects U.S. WTO obligations.

The United States will need a reasonable period of time in which to implement.

3.         UNITED STATES ‑ CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000:  IMPLEMENTATION OF THE RECOMMENDATIONS ADOPTED BY THE DSB

A.        STATEMENTS BY THE EUROPEAN UNION AND JAPAN

As the United States has already explained at previous DSB meetings, the President signed the Deficit Reduction Act into law on February 8, 2006.  That Act includes a provision repealing the Continued Dumping and Subsidy Offset Act of 2000.  Thus, the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

We welcome Members’ recognition that the 2006 Deficit Reduction Act does not permit the distribution of duties collected on goods entered after October 1, 2007 – some four years ago.

We therefore do not understand the purpose for which the EU and Japan have inscribed this item today.

With respect to comments regarding further status reports in this matter, as we have already explained at previous DSB meetings, the United States fails to see what purpose would be served by further submission of status reports repeating, again, that the United States has taken all actions necessary to implement the DSB’s recommendations and rulings in these disputes.

5.         UNITED STATES – MEASURES AFFECTING THE PRODUCTION AND SALE OF CLOVE CIGARETTES

A.        JOINT REQUEST BY INDONESIA AND THE UNITED STATES FOR A DECISION BY THE DSB (WT/DS406/5)

The United States is joining Indonesia in asking that the DSB agree to provide additional time for adoption or appeal of the panel report in this dispute by adopting the draft decision set forth in document WT/DS406/5.

The Appellate Body has informally requested the parties to delay any appeal in this dispute until January 2012.

After discussions with Indonesia, the United States agreed to join Indonesia in making this request.  The draft decision would provide for DSB adoption of the Panel report by negative consensus until January 20, 2012, upon request by a party to the dispute.

We also expect that the greater flexibility in scheduling any appeal would enable the Appellate Body to complete its work within the time periods set out in Article 17.5 of the DSU.

We would appreciate the DSB’s support for the draft decision.